Pendulum swinging for truckload

After almost two years of declining freight volumes, there are signs now that the truckload portion of the industry is “approaching equilibrium in (capacity) supply and demand,”

PRINCETON, NJ | After almost two years of declining freight volumes, there are signs now that the truckload portion of the industry is “approaching equilibrium in (capacity) supply and demand,” according to John White, exec. vp of operations at U.S. Xpress Enterprises Inc.

Even in the last downturn earlier this decade, truckload carriers continued to expand capacity by 2% to 3%, but in the current market “carriers actually are taking capacity out of marketplace, and we’ve never seen that before,” he said delivering an industry outlook presentation at the ALK Transportation Technology Summit here.

Between fleet’s shrinking capacity, bankruptcies, and repossession, White estimates that “80,000 trucks will have been taken out of the market by the third quarter.” Going into 2009 and 2010, the surviving carriers “will have the wind at our backs.

“In my opinion, we’re about to see the pendulum swing from shippers to carriers, and we could see 2005 (capacity) conditions in six months,” he told the group. Predicting “prosperous times for those that survive,” he said that U.S. Xpress has already seen its revenues increase 10% in the first quarter, while its brokerage divisions is currently fielding “800 calls a day for spot quotes.”

Long term, White cautioned that trucking, and truckload carriers in particular, still must address the issue of attracting 50,000 new drivers a year for the next 10 years. “It’s not an issue now, but it won’t take much of an uptick [in economic activity] to bring the problem back,” he said.